Identifier
Created
Classification
Origin
09ASHGABAT93
2009-01-21 12:51:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN RAISES FARMER COMPENSATION TO ENCOURAGE
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UNCLAS ASHGABAT 000093
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURE COUNSELOR
E.O. 12958: N/A
TAGS: EAGR ECON TX
SUBJECT: TURKMENISTAN RAISES FARMER COMPENSATION TO ENCOURAGE
INCREASED PRODUCTION
REF: (A) ASHGABAT 81 (B) ASHGABAT 47
UNCLAS ASHGABAT 000093
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURE COUNSELOR
E.O. 12958: N/A
TAGS: EAGR ECON TX
SUBJECT: TURKMENISTAN RAISES FARMER COMPENSATION TO ENCOURAGE
INCREASED PRODUCTION
REF: (A) ASHGABAT 81 (B) ASHGABAT 47
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: President Berdimuhamedov recently announced
higher state prices paid to farmers for wheat and rice and increased
2009 crop production targets at an extended Cabinet meeting. The
new prices are meant to encourage farmers to increase production and
ensure a steady increase of domestically-produced food. They reveal
the government's concern to improve the domestic food supply in the
face of increasing food prices on the international market.
However, inflation will eat away at these increases, making their
impact negligible. Many farmers believe that only free market
access will incentivize the agriculture sector to such an extent
that an increase in real prices can take place. END SUMMARY.
NEW PRODUCTION TARGETS AND PRICES FOR WHEAT AND RICE
3. (U) At an extended Cabinet meeting held on January 15, in
addition to a reshuffle of government officials (Ref A),President
Berdimuhamedov announced new state targets for cotton and wheat
production, as well as increased state prices paid to farmers for
wheat and rice. The decree stated that Turkmenistan will produce
1,050,000 tons of cotton and 1,600,000 tons of wheat in 2009. Also
in 2009, state procurement prices are 900 Turkmen manat (USD 315)
per 1,000 kilograms of rice; 270 Turkmen manat (USD 94) per 1,000
kilograms of wheat. According to the decree, in 2010, the
government will raise the wheat price to 400 Turkmen manat (USD
140). These new prices will significantly raise prices paid to
farmers: for example, in 2008, the state paid 800,000 old manat
(USD 56) per 1,000 kilogram of wheat and 1,000,000 old manat (USD
70) per 1,000 kilogram of rice. (NOTE: The exchange rate in 2008
was 14,250 manat per USD 1.)
BUT INFLATION WILL EAT INCREASED PAYCHECKS
4. (SBU) COMMENT: President Berdimuhamedov's new target for
domestic wheat production -- which is close to double the amount of
wheat that Turkmenistan produced in 2008 (Ref. B) -- and increased
state procurement prices for wheat and rice clearly indicate the
government's concern about improving the domestic food supply in the
face of increasing food prices on the international market.
However, continuing inflation on the local market will eat away at
these increases by the time the farmers get paid. Farmers who are
alumni of U.S. Government exchange programs feel pessimistic about
the true impact of the government's new prices and believe that only
farmers' free access to the market will boost agricultural
production and income. END COMMENT.
MILES
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
ANKARA FOR AGRICULTURE COUNSELOR
E.O. 12958: N/A
TAGS: EAGR ECON TX
SUBJECT: TURKMENISTAN RAISES FARMER COMPENSATION TO ENCOURAGE
INCREASED PRODUCTION
REF: (A) ASHGABAT 81 (B) ASHGABAT 47
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: President Berdimuhamedov recently announced
higher state prices paid to farmers for wheat and rice and increased
2009 crop production targets at an extended Cabinet meeting. The
new prices are meant to encourage farmers to increase production and
ensure a steady increase of domestically-produced food. They reveal
the government's concern to improve the domestic food supply in the
face of increasing food prices on the international market.
However, inflation will eat away at these increases, making their
impact negligible. Many farmers believe that only free market
access will incentivize the agriculture sector to such an extent
that an increase in real prices can take place. END SUMMARY.
NEW PRODUCTION TARGETS AND PRICES FOR WHEAT AND RICE
3. (U) At an extended Cabinet meeting held on January 15, in
addition to a reshuffle of government officials (Ref A),President
Berdimuhamedov announced new state targets for cotton and wheat
production, as well as increased state prices paid to farmers for
wheat and rice. The decree stated that Turkmenistan will produce
1,050,000 tons of cotton and 1,600,000 tons of wheat in 2009. Also
in 2009, state procurement prices are 900 Turkmen manat (USD 315)
per 1,000 kilograms of rice; 270 Turkmen manat (USD 94) per 1,000
kilograms of wheat. According to the decree, in 2010, the
government will raise the wheat price to 400 Turkmen manat (USD
140). These new prices will significantly raise prices paid to
farmers: for example, in 2008, the state paid 800,000 old manat
(USD 56) per 1,000 kilogram of wheat and 1,000,000 old manat (USD
70) per 1,000 kilogram of rice. (NOTE: The exchange rate in 2008
was 14,250 manat per USD 1.)
BUT INFLATION WILL EAT INCREASED PAYCHECKS
4. (SBU) COMMENT: President Berdimuhamedov's new target for
domestic wheat production -- which is close to double the amount of
wheat that Turkmenistan produced in 2008 (Ref. B) -- and increased
state procurement prices for wheat and rice clearly indicate the
government's concern about improving the domestic food supply in the
face of increasing food prices on the international market.
However, continuing inflation on the local market will eat away at
these increases by the time the farmers get paid. Farmers who are
alumni of U.S. Government exchange programs feel pessimistic about
the true impact of the government's new prices and believe that only
farmers' free access to the market will boost agricultural
production and income. END COMMENT.
MILES